Ensure Sufficient Retirement Funds

By Fullerton Fund Management, 19 September 2018 8720

Average household expenditure has increase by 4.4% p.a. from 2007/08 to 2012/12. The monthly expenditure ranges from SGD482 to SGD4,117 among retiree households of different quintile. These information are collected by the Department of Statistics Singapore, which conducts the Household Expenditure Survey every 5 years. The last survey was based on data collected in 2012 and 2013. (Source: Household Expenditure Survey 2012)

What about you? What is your monthly expenditure now, and how much will your expenditure be when you retire? Generally, expenses may be halved upon retirement. You would have been able to build a retirement fund. Do you know whether it is sufficient for your retirement? If there is a shortfall, how do you intend to fill the gap? Days of depending on our children are gone. There are more older than younger Singaporeans, which means that the financial burden our children have to bear is heavier. 

Source: Department of Statistics, M810001 – Indicators on population, annual; OASR: Residents aged 15-64 years per resident aged 65 & over

There will be fewer working adults to support those aged 65 and above from 2018. With the decrease in Old-Age Support Ratio (OASR), there is a need for the aged to be able to take care of themselves financially. And many of us would prefer to be financially independent rather than dependent on our children during our older age. 

With shifts of life goals away from material gains towards aspirations, such as comfort, celebrations, healthcare and continuity, life upon retirement is not just about meeting basic needs and necessities anymore. It is about living life to the fullest and to fulfil the dreams of younger days. 

In order to live your dreams, you need to have a good understanding of your physical and financial well-being. 

You need to plan adequately for your retirement. Depending on the life-stage that you are in, your investment objectives will be different. 

Before retirement, you should focus on wealth creation, i.e. growing your money. Your money should continue to grow after you retire. Upon retirement, you should be focused on generating a steady income while your wealth continues to enjoy stable growth. If you have excess, you can also set aside a small portion of your retirement fund to capitalise on opportunistic gains. 

Find out how your investment can enjoy growth with income – visit Income’s Adviser Connect to speak to your financial planner now.